Effective Components on the Trend Toward Agricultural and Animal Product Insurance in Rural Regions (Case Study: Khomein County)

1. Given the importance of the agriculture sector in the country’s economy, activities in this sector are different from other productive and economic activities. Such difference is considered as a high-risk action due to the agriculture’s heavy reliance on nature. Product insurance is a significant tool to reduce the risks of natural disasters; yet establishing agricultural insurance in a rural society must be taken into account as a new phenomenon. Similar to any other form of innovation, its reception by agricultural producers may face resistance or involve a slow and time-consuming progress which is a function of various socioeconomic factors. Without awareness about such factors, the possibility of attracting a proper participation of agricultural beneficiaries is little. As a result, the present study attempts to identify the most important factors on the trend toward agricultural and animal product insurance of rural residents in order to institutionalize these factors in Khomein County with respect to their extent of effectiveness.
2. THEORETICAL FRAMEWORK: Investigations show that agricultural insurance is well received by every country in the world, whether developed or developing, as one of the most effective ways of risk management as well as supporting agricultural producers. In this regard, agricultural product insurance can be considered as one of the pillars of agricultural development because by employing such a mechanism, the small savings gathered by numerous farmers to pay for insurance fees can be used to compensate for the damages that some of them had faced along with offering more security to agricultural producers.
From a historical perspective, it can be stated that the growth in agricultural insurance began when farmers became united to protect their product incomes and shield themselves from damages done by storm and hail. In other words, agricultural insurance has evolved from hail insurance during the past century.
3. The present inquiry is a cross-sectional study that is conducted to examine the effective components on trend toward agricultural and animal product insurance among rural residents. According to the purpose and nature of the study, the research method is applied and descriptive-analytical, respectively. The total population in this study include 340 insured individuals from Rostaq village located in Khomein County. The sample size was estimated to be 180 individuals using the Cochran formula, and the samples were selected relative to the share and number of insured people in each village, using stratified random sampling. After the questionnaires were completed, 160 samples were examined (a number of questionnaires were invalid). All statistical analyses in this study were carried out using Amos Graphics 20 software.
4. In order to examine the effective factors on trend toward agricultural and animal product insurance in rural societies in the first model, twenty factors were identified. In the second model, the effective components on agricultural and animal product insurance investigated in this study were divided into two categories based on the contents, theme of variables and the author’s assumption.
1. The first category includes components related to the insurance company or those organizational factors that are specified in this study as factors governing the organization. This category was examined in three aspects involving satisfaction toward the organization’s services, information and insurance advertisements, and the insurance conditions and regulations.
2. The second category involves factors related to the (insured) individual which were specified as factors governing the individual in three aspects including financial and welfare, information and awareness, and personal and motivational. Consequently, a two-factor analysis model was employed in this section.
Among organizational factors, the insurance conditions and regulations involve the highest load (0.68) on its structure, i.e. organizational components. This means that this variable is more effective in clarifying the extent of trend toward insurance compared to other organizational factors. Subsequently, variables including satisfaction toward insurance services and information and notices are considered as organizational components with 0.54 and 0.42 values, respectively. However, among the three aspects of components concerning the trend toward insurance governing the individual, the financial and welfare components involve the highest load (0.76). Successively, there are personal and motivational (0.48) and information and awareness (0.36) components. On the other hand, attention to organizational and individual components with a correlation of 0.43 indicate the connection between these two categories of factors which means that the individual and organizational components affect one another. The significance of factor load concerning each variable are demonstrated in Table 5. As the findings show, all the factor loads with a P Value of less than 0.05 are significant.
5. According to the findings along with considering the importance of agricultural and animal product insurance as a support for activities within the agricultural sector, the identification of factors that indicate trends toward this type of insurance would be the first essential step to enforce them and reduce restrictive factors. In terms of research, it is recommended to conduct a set of qualitative studies in this area with special focus on experiences of the insured so that the subject can be analyzed with more depth. Since the focus of this study was only placed on the insured, attention to the insurance company staff’s perspective could also supplement the study. Furthermore, in order to provide a better and deeper setting for farmers to become more familiar with the purposes and strategies of agricultural and animal product insurance, the planning, policies and organizational performances of authorities in this area must be focused upon enforcing the effective factors and reducing the restrictive ones, offering a background for more interactions between authorities and rural residents, holding educational courses for rural residents to become more familiar with insurance companies, increasing advertisement and providing more information for rural residents, improving the quality of services for the insured and prioritizing for research.